Though you may have scored a great deal on a new car under the government’s Cash for Clunkers program, insuring it could be costly. Auto insurance premiums for a new vehicle are generally much higher than what you probably paid for your old jalopy, particularly if you’re financing it, as a higher level of coverage is required. But there are ways to trim costs, which means inquiring about your insurance rate early on in the setup process. Kimberly S. Johnson, Associated Press

Ask for a higher deductible: In the event of an accident, the amount you pay out-of-pocket varies, depending on your policy. The higher the deductible, the lower the premium. “Increasing your deductible from $250 to $500 could reduce your collision and comprehensive coverage by 15 to 30 percent,” said Loretta Worters, vice president of the Insurance Information Institute. “Going to $1,000 could save you about 40 percent or more.”

Bundle your auto insurance with your home or renter’s insurance: Many insurance companies offer a discount on auto premiums if they can sign you up for another policy.

Maintain good credit: Many people assume that after getting financing for a new car, no more credit checks are required. But an increasing number of insurance agencies are analyzing credit scores and coming up with a “credit-based insurance score” to help determine rates.

Each insurer considers credit scores differently, so it’s important to ask what impact your credit rating has on your insurance rate. “They’ve found an association between lower insurance credit scores and higher claims filings,” said Jeff Blyskal, senior editor for Consumer Reports.
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